The Most Important Chart For 2013

As we ring out the old and ring in the new, investors face what seems a fresh world of opportunity. After all, stock market gains exceeded 20% last year, with “more of the same, but not quite as much” on … Read More

Is There a PIIG in Germany’s Parlor?

“It is a truth universally acknowledged that a single country in possession of a current account surplus must be in need of an export market.” With apologies to Jane Austen, of course: the sentiment thus expressed actually is anything but … Read More

Wither Gold

The inflation outlook is the key to gold’s prospects. Everyone looks to central-bank policy, whether for interest rates or direct liquidity expansion via quantitative easing. But if that were the determining factor, we’d have had rampant inflation for quite some … Read More

Waiting For Goldot: Why Inflation isn’t Showing Up

In the news for August 15th, comes this interesting tidbit from the Wall Street Journal: hedge-fund billionaire investor John Paulson, of the gold bulls, in the second quarter cut $2 billion from his hedge fund’s investment in the SPDR … Read More

How the ‘Asian Tiger’ Model Mauled the World Economy

“China Inflation Data Underscore Weak Economy” runs the New York Times headline datelined July 9th, 2013 — yet another in the unrelenting series of data points indicating economic slowdown in the world’s most populous country. Consumer prices rose only 2.7% … Read More

Talking Turkey

It seemed a sure thing. Turkey was the great exception to the dreary tale of economically dysfunctional Muslim countries. A candidate for membership in the European Union, a long-time member of NATO, a “secular” Islamic state, all spoke in Turkey’s … Read More

The Conundrum of Low Inflation Explained?

The conundrum of a low-growth, low-inflation environment combined with expanding, voluminous central-bank balance sheets has many scratching their heads. A recent stab at an explanation was given by Martin Feldstein, asking “Why is US inflation so low?”

Since 2008, Feldstein … Read More

How to Make the Euro Project Work

The euro seems to be on its last legs, and the vision which inspired its genesis seems to have vanished from the politicians sponsoring it. The recent spat with England and Prime Minister Cameron has only served to highlight the … Read More

Jimmy Stewart Banking versus James Steuart Banking

In his excellent book The New Lombard Street, Perry Mehrling writes of “a world that never was … Jimmy Stewart banking of blessed memory” (p. 117). This is an obvious  reference to one of Jimmy Stewart’s most famous roles: George Bailey in … Read More

Why We Do NOT Have a Fractional-Reserve System

This blog entry is for anyone who believes, as John Tamny here puts it, that “Fractional reserve banking quite simple IS.”

Among the many good points Tamny makes in his article, there is the underlying assumption that our system is, in some important … Read More

Private Issue of Money — the Root of Our Monetary Problem?

In a comment posted under an article by my friend Jerry Bowyer (Where’s the Hyperinflation?), “ps61penn62prin64” writes that “private currency monetary systems… are doomed to fail the interest of American citizens.”

Bowyer’s article discusses the sizeable increase in the money … Read More

Fact and Fiction on Reserve Requirements

In the system we have now, we do use both a reserve restriction and an asset restriction. But, the modern reserve restriction has changed fundamentally, and has nothing to do with the monetarist understanding of reserve restrictions, except in a … Read More